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Do I have to pay income tax on the proceeds from a reverse mortgage? | 1st INTEGRITY MORTGAGE

Do I have to pay income tax on the proceeds from a reverse mortgage?

I am not a tax professional but I did find this information on the IRS web site. “ Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable.”  In the next sentence the IRS clarifies that deferred interest on a reverse mortgage is not tax deductible until it is paid.  “Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full.”  So converting a forward mortgage to a reverse mortgage while not taxable, will most likely have a tax impact. Please consult with your tax professional.

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